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Portugal's president keeps coalition govt in power

Portugal's President Anibal Cavaco Silva addresses the country from the Belem presidential palace in Lisbon Sunday, July 21 2013. Cavaco Silva had asked the government to reach a consensus with the Socialist Party, the main opposition party, but on Friday Socialist leader Antonio Jose Seguro said his party had left the talks. The president announced that he won't call elections. (AP Photo/Armando Franca)

LISBON, Portugal (AP) -- Portugal's president has accepted a compromise reached by the coalition government that allows it to stay in power, defusing a crisis that had roiled financial markets.

In an address to the nation, President Anibal Cavaco Silva ruled out early elections, opting for "the best alternative" which is "the continuation in office of the current government."

The coalition nearly split July 2 when Foreign Minister Paulo Portas, the leader of the junior party, threatened to resign.

A compromise was reached within the coalition when Portas was appointed deputy to Prime Minister Pedro Passos Coelho, but this step required the president's agreement, which he gave late Sunday.

The political dispute had raised fears that Portugal would be unable to abide by the terms of its 78 billion euros ($102 billion) international bailout.